The U.S. government already offers a tax credit of $7,500 on eligible EVs to help soften the blow when it comes to pricing, and one congressman wants to further increase that federal tax credit.

Vermont Rep. Peter Welch (D) announced this week that he wants to make it easier for consumers to purchase EVs by increasing the tax credit to $10,000 via the Electric CARS Act.

In addition to boosting the credit by $2,500, it would allow the tax credit to be applied at the point-of-sale instead of when the individual’s taxes are filed. The bill would also be tailored to better accommodate “many middle-income Vermonters do not have enough tax liability to qualify for the full tax credit.”

Vermont Rep. Peter Welch plugging in a Ford Fusion Energi

“One of the biggest contributors to climate change in Vermont and across the country is vehicle emissions. It is essential that we transition to cleaner, more efficient transportation like electric vehicles,” said Rep. Welch said an electric vehicle charging station near the Vermont Statehouse.

“The battery life and fuel efficiency of electric vehicles are steadily improving making them more accessible and practical to drive. This legislation will make them more affordable while saving Vermonters money at the gas pump and reducing their environmental footprint.”

Welch says that he plans to introduce new legislation to increase the EV tax credit when he returns to Washington.

Even an EV nut like myself knows gasoline has minimal subsidies attached.

The case for EV tax credits isn't about equalizing subsidies, so don't bother going there. It's that cars stay on the road for 15+ years, but people don't consider gas costs for more than a few of those years (plus environmental benefits, but those are hard to quantify). We let someone pay $7500 less tax because his purchase decision will save future, generally lower income owners of that car $10-20k in gas over a decade (electricity costs a fraction of that to generate), and hurts the trade deficit by a similar amount (affecting jobs, national wealth, etc). It's a win for long term economy.

This proposal? Surprisingly, I'm not really for it. I think a longer term $5k subsidy, once the $7500 expires, is better.